Brian Cannan: Today I'm with Greg Jemmeson from Jemmeson Fisher Solicitors and Accountants. Hello Greg.
Greg Jemmeson: Hi, Brian.
Brian: We're going to talk about this wonderful thing called a database that every agent has, and they believe it's theirs and they own and the principals want to protect that data if someone leaves, and I'm going to let you take over and have a chat about that.
Greg: This is a very misconceived area. If I'm an employee, and I'm referring people into the business, I'm out door knocking, I'm meeting people on weekends, I'm meeting with them at the pub, and I'm bringing them in and putting them into the database. There's this perception that they're my clients, and we all talk about "my clients". In actual fact, they become clients of the business, not of the individual employee. The courts have ruled because the employee has been engaged and is paid by the business, that they are gathering those potential clients for and on behalf of the business. So that database belongs purely to the business and not the individual salesperson.
Brian: So if I'm an employee, and I'm leaving, and I believe that they're my client.
Greg: You can't take them with you.
Brian: Okay, so I didn't take them with me and I left. And those people contacted me.
Greg: So this will depend on how the employment agreement is structured. Now, a standard employment agreement prepared by REEF has non solicitation and confidentiality clauses. And quite often they might have a restraint. But let's say we don't have a restraint, and I'm allowed to go work down the road. Depending on how the employment agreement is structured, it will generally say I can't take confidential information. So that means as an employee, at 10 o'clock on my last night, I can't sit there and send the entire businesses database to my gmail account or print out a copy of it. It will depend if there's a solicitation clause, if I don't have a solicitation clause, it means I can go down the road work for another agent. If a potential former client of that business contacts me directly, then that's not solicitation. But if I ring them and say, Hey, I'm down the road, I know you want to sell your house, then that would be solicitation and fall foul of the employment agreement.
Brian: So that's if you're an employee, what happens if you're a contractor? First of all, commission only can still be an employee.
Greg: A commission only agent is an employee.
Brian: And then if you set up your own company, and you're doing conjunction with your own agency.
Greg: If I become an independent contractor, I'm running now my own business. And so I may will be inputting all of the clients into the businesses database. But as an independent contractor, those people that I'm putting into the businesses database, are actually my clients. So when the contract arrangement comes to an end, I'll put 250 people into that database. I can take those 250 contacts with me and continue to work with them.
Brian: Being an independent contractor could you be contracted where at the end you couldn't take it? Could that be in your contract?
Greg: No because then that would fall foul of the what's the indication of that I'm a contractor, and that would be a controlling test and then the office of state revenue and the ATO would knock it down as a farce.
Brian: Saying that, you're not an independent contractor you're an employee?
Greg: That's it.
Brian: Well, that's very interesting Greg. I think we all learnt a lot with that. Thank you very much.